Unfortunately, personal finance has not yet become a required subject in school, so you might be fairly clueless about how to manage your money when you make your first step into the real world. If you think that understanding personal finance is extremely complicated though, you’re wrong. It’s actually quite simple.
Below are 10 easy to understand, yet valuable personal finance tips I found on The Simple Dollar. Check them out:
1. Spend less than you earn.
2. If you’re facing a pile of debts, make minimum payments on all of the debts but the one with the highest interest rate, then make the biggest payment you can each month on that high one.
3. Never expect that your “future self” or anyone else will bail you out of your dumb mistakes today and remember that only you can make better choices for yourself.
4. The quickest way to financial recovery is to get a grip on your spending impulses.
5. Life is going to hand you emergencies, so keep at least $1,000 in your savings account for those emergencies.
6. Be completely open with your spouse about every single dime that comes in and every single dime that you spend.
7. Buy items that will last for a very long time at the best possible price and you’ll rarely be unhappy with them.
8. If your employer offers matching on your 401(k), take as much of it as you can get.
9. When you’re deciding how to invest, remember that past performance does not indicate future returns and focus instead on the fees and expenses.
10. If you have dependents who rely on you, you ought to have life insurance, but ignore any salesperson who tries to sell you anything other than a term policy.
Short and sweet right?
As the economy evolves, it’s more important than ever for us 20 year olds to plan for our future and understand the ‘time value’ of preparing for our future. Being financially savvy is only hard if you let your money consume you, but don’t worry because that is where I come in. I am here to help make sense of your money! For other financial tips, check out more posts on my blog to help give you a head start on your finances!
Until Next Time,